Definition
Revenue share, or RevShare, is a commission structure where you pay affiliates a percentage of the revenue from each sale they drive. Instead of a flat dollar amount per conversion, the affiliate earns proportionally to the transaction value. If you set a 20% RevShare and an affiliate drives a $100 sale, they earn $20. A $500 sale earns them $100.
How it works
You define a percentage rate in your affiliate program settings. When an affiliate drives a conversion, your tracking system records the sale amount and calculates the commission as a percentage of that amount. For a subscription business, RevShare can apply to the first payment only or to recurring payments for the lifetime of the customer, depending on your program terms.
For example, a SaaS company might offer 25% recurring RevShare. An affiliate refers a customer who signs up for a $200/month plan. The affiliate earns $50 every month the customer stays subscribed. Over two years, that single referral pays out $1,200. This is why recurring RevShare is extremely attractive to affiliates who drive high-quality, long-retention traffic.
RevShare vs. CPA: choosing the right model
The choice between RevShare and a flat CPA (cost per action) commission depends on your business model, margins, and the type of affiliates you want to attract.
| Factor | RevShare | CPA (flat fee) | |---|---|---| | Payment structure | Percentage of sale value | Fixed amount per conversion | | Cost predictability | Variable (depends on order size) | Fixed (same cost every time) | | Affiliate motivation | Drives high-value, long-retention customers | Drives volume regardless of value | | Cash flow impact | Ongoing (for recurring) | One-time per conversion | | Best for | SaaS, subscriptions, variable pricing | Lead gen, fixed-price products | | Risk alignment | High (both sides win or lose together) | Low (affiliate gets paid regardless of LTV) |
Many programs offer both models and let affiliates choose, or assign the model based on affiliate type. Content affiliates with evergreen traffic often prefer recurring RevShare because it compounds over time. Performance marketers running paid media usually prefer CPA for predictable ROI calculations.
Common RevShare structures
One-time RevShare
The affiliate earns a percentage of the first transaction only. If a customer pays $100 and your RevShare is 20%, the affiliate earns $20 once. Subsequent purchases or renewal payments do not generate additional commissions.
Best for: E-commerce, single-purchase products, programs with thin margins that cannot sustain recurring payouts.
Recurring RevShare
The affiliate earns a percentage of every payment the referred customer makes for the lifetime of the customer (or for a defined period). This is the most powerful incentive for affiliates because a single quality referral can generate income for years.
Best for: SaaS, subscription services, membership sites. A $200/month customer at 25% RevShare pays the affiliate $600/year per referral. Scale that to 50 active referrals and the affiliate is earning $30,000/year from one program.
Tiered RevShare
The percentage rate increases as the affiliate drives more volume. For example:
- 0-10 sales/month: 15% RevShare
- 11-50 sales/month: 20% RevShare
- 51+ sales/month: 25% RevShare
Tiered structures reward growth and encourage affiliates to scale. They also help you manage costs at the low end while staying competitive for top performers. This works similarly to tiered EPC optimization where your best-performing segments get the best economics.
Capped RevShare
RevShare is paid up to a maximum dollar amount per referral. For example, 20% RevShare capped at $500. This protects you on high-value transactions where an uncapped percentage would exceed your margin. Common in enterprise SaaS and high-ticket e-commerce.
Hybrid (CPA + RevShare)
A flat upfront payment plus an ongoing revenue share. For example, $50 CPA upfront plus 10% recurring RevShare. The CPA component rewards the affiliate immediately (cash flow), while the RevShare component incentivizes quality (retention). This is increasingly popular in SaaS because it balances affiliate satisfaction with program sustainability.
Setting the right RevShare rate
Your RevShare rate should be based on unit economics, not competitor benchmarks. Here is a framework:
1. Calculate your customer LTV
If your average customer stays 18 months at $100/month, your LTV is $1,800.
2. Determine your allowable acquisition cost
If you can afford to spend 25% of LTV on acquisition, your budget is $450 per customer.
3. Back into the RevShare rate
For a one-time RevShare on the first payment ($100), you could offer up to 450% (obviously unrealistic). For recurring RevShare across the 18-month lifecycle, $450 / $1,800 = 25% RevShare. That is your ceiling.
4. Factor in other costs
Subtract your holdback reversal rate (if 10% of conversions reverse, your effective rate is higher), payment processing costs, and any affiliate management overhead. A realistic rate for SaaS is typically 15-30% recurring.
Why it matters
RevShare aligns incentives between you and your affiliates better than any other model. Affiliates are motivated to send customers who actually stick around and spend money, not just anyone who will complete a free signup. This naturally filters for quality because the affiliate only makes real money when you do.
The downside is unpredictability. Your cost per acquisition varies with order size, and if you offer recurring RevShare, your affiliate costs grow as your customer base grows. This can complicate financial forecasting. Many programs solve this by offering RevShare for the first 12 months or capping total payouts per referral.
For a detailed look at how RevShare affects your per-click economics, see our guide to EPC (earnings per click).
RevShare pitfalls to avoid
Setting rates too high
It is tempting to offer 40-50% RevShare to attract affiliates, but if your margins cannot sustain it, you will either burn cash or have to cut rates later. Cutting RevShare rates is one of the fastest ways to lose your best affiliates. Start conservative and increase for top performers.
Ignoring churn in recurring models
If your average customer churns after 4 months but you modeled your RevShare rate assuming 18-month retention, your actual acquisition cost per referral is much lower than planned. This sounds good until you realize affiliates earning less than expected will leave for better-paying programs. Model with realistic churn numbers.
No holdback period
Paying RevShare immediately without a holdback period exposes you to refund fraud. An affiliate drives 100 signups, collects commissions, and 60 of them refund within a week. Always pair RevShare with an appropriate holdback window.
Trcker tip
Trcker supports both one-time and recurring RevShare with automatic commission calculations on every payment event, so you never have to manually reconcile recurring payouts. You can set tiered rates, caps, and hybrid CPA + RevShare structures per offer.
Frequently asked questions
How is RevShare tracked for recurring subscriptions?
Your payment processor (Stripe, QuickBooks, etc.) sends a webhook or postback each time a recurring payment is processed. Your tracking system matches the payment to the original referred customer and calculates the RevShare percentage automatically. The affiliate sees each recurring commission as a separate line item in their partner portal.
What happens to RevShare when a customer upgrades or downgrades their plan?
The RevShare percentage stays the same, but the dollar amount changes with the new plan price. If a customer upgrades from $100/month to $200/month with a 20% RevShare, the affiliate's commission increases from $20 to $40/month. Downgrades work the same way in reverse.
Should I offer RevShare or CPA to new affiliates?
It depends on the affiliate type. Content creators with evergreen traffic (blogs, YouTube) often prefer RevShare because it compounds. Performance marketers running paid ads usually prefer CPA for predictable ROI. Consider offering both options and letting affiliates choose, or start all affiliates on CPA and offer RevShare to proven performers.
How do I handle RevShare when customers pay annually?
For annual payments, calculate the RevShare on the full annual amount and pay it either as a lump sum or split across 12 monthly installments. Most programs pay it as a lump sum on the payment date because the customer has already committed to the full year. Apply a longer holdback period (30-60 days) to account for annual refund windows.